Why CFOs must avoid being overwhelmed by details
It’s easy for a CFO to get drawn into work that was never intended to be the domain of the finance function or a top company executive.
Take, for example, human resources, which many CFOs oversee. The CFO may be involved in high-level discussions, planning, and oversight for the economics of salaries at the organisation.
Over time, however, the CFO can get pulled into more meetings – and even employee evaluations – because people want the head of finance to understand why raises are being given. But the CFO doesn’t have time to sit in on every evaluation or figure out how much each raise should be.
“You start getting drawn into [meetings], and before you know it, people think it’s something you should be doing,” said Bernie Leone, CPA/CITP, CGMA, an accounting and consulting partner in New York and Morristown, N.J., for accounting firm WithumSmith+Brown. “And you’ve picked up a bad habit.”
Without a doubt, CFOs have seen their duties grow in recent years. A substantial majority (85%) of US CPAs said the role of the CFO and the finance function has expanded moderately or significantly in their organisation, according to a recent American Institute of CPAs survey.
But the expanding duties of the finance function can lead to wading into unnecessary details so deeply that it can undermine the CFO’s effectiveness. That may be why 35% of more than 2,100 US CFOs surveyed by finance and accounting outsourcing provider Robert Half Management Resources said delegating more responsibilities is the most effective method for managing their time at work.
Paul Vanek, CPA, CGMA, managing member of The Vanek Consultancy Group in Houston, said effective delegation begins with confidence in one’s staff. “It’s not just having good people,” he said. “It’s having trust in them, that when you give them something, they’re going to do it.”
At private companies, the drain on CFOs’ time sometimes manifests itself when the owner of a company seeks advice on personal business from the CFO, Leone said.
It may start with helping with investment performance management of the owner’s portfolio. Then the owner decides to buy real estate or get involved in other investments, and the CFO winds up doing due diligence and arranging the deals, Leone said.
The time the CFO has to devote to the company’s actual business slowly shrinks. And the monthly close isn’t going away just because you’re spending three days investigating the value associated with the vacation home the company owners are considering purchasing.
“You still have all the tasks to perform as CFO,” Leone said. “So look at where you’re spending your time to make sure you have the right balance.”
Other time-savers, according to Leone, include:
- Track your time. Marking down everything you do over a two-week period can help you evaluate how you manage your time, Leone said. At the end of those two weeks, an analysis of all work performed can help uncover which activities had real value and which activities were less useful and should be reduced in the future.
- Understand the reason for meetings. Although meetings are important for sharing information, Leone said, systems or processes can be made more efficient to convey that information. For instance, the length of a meeting to review the details of financial statements can be reduced if the financial statements are provided to the participants ahead of time. Then the meeting could be limited to a short overview and addressing questions.
- Stick to the subject matter. Setting an objective and a time frame for a meeting – and sticking to them – can keep meetings from getting out of control, Leone said.
Related CGMA Magazine content:
“Tips for Taming the Email Beast”: Setting proper boundaries regarding email outside of business hours can reduce stress for managers and employees.
“Eight Cures for Your Costly Time-Management Ills”: Some simple strategies can reduce the time wasted in an organisation and boost productivity.
—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine editorial director.